FTB- Property Query

Xhjb6tk

FTB here, so currently going through purchasing a leasehold flat.

So I wanted to ask if anyone else has been in this situation. So the property is originally marketed as a standard leasehold flat of which is from a converted house. 

The lease is between the freeholder (this is a separate entity) and Management Company (this is run by the residents and one upon completion would buy a share of this) and was told that this would not constitute a Share of Freehold. 

I was told by my solicitors that the freeholder deals with:

• Lease Extensions
• Collecting ground rent
• Administering buildings insurance

The MC does everything else.

Would this constitute a Right to Manage scenario?

Has anyone gone through this as a FTB?

eddddy

Xhjb6tk said:

The lease is between the freeholder (this is a separate entity) and Management Company (this is run by the residents and one upon completion would buy a share of this) and was told that this would not constitute a Share of Freehold. 

A lease would either be...

• 1) Between 2 parties: Freeholder (a.k.a. Landlord or Lessor) and Leaseholder (a.k.a. Tenant or Lessee)

• 2) Or between 3 parties: Freeholder, Management Company and Leaseholder (This is called a tripartite lease)

It would be unusual for a converted flat to have option 2, it's much more usual to have option 1.


Based on your description, it's quite possible that there is a "Right To Manage Company" (RTM company) that has been set up by the leaseholders, and it has taken over management of the building. That could apply to option 1 or option 2 above.

The slightly strange thing is that a RTM Company would normally arrange the Buildings Insurance - not the freeholder. (But the freeholder would collect ground rent and deal with lease extensions.)


But any half-decent estate agent should be able to tell you if a RTM Company is in place on a property they are marketing.